Coats Group

Website: Coats Group
Index: FTSE 250
EPIC: COA
Supersector: Industrial Goods and Services
Sector: General Industrials
Subsector: Diversified Industrials
Market Cap: £1.69B
Payout Frequency: Semi-Annual

Next Coats Group Dividend

Coats Group next goes ex-dividend on 07/05/2026. This will be the Final dividend for 2026.

The dividend per share amount is 2.28¢ (USD) and the payment date is 28/05/2026.

Dividend Declaration and Key Dates

Final dividend per share: 2.28 US cents (up ~4% year-on-year vs 2.19c).
Total FY25 dividend: 3.28 US cents (up 5% year-on-year).
Ex-dividend date: 07/05/2026.
Record date: 08/05/2026.
Payment date: 28/05/2026.
Currency: US cents per ordinary share.
Dividend policy: Board aims to maintain a growing dividend, within a disciplined capital allocation framework (potential buybacks considered in future).

Coverage and Capacity

Adjusted EPS (continuing): 9.26c ? total DPS cover ~2.8x.
Reported EPS (continuing): 6.79c ? cover ~2.1x.
2025 free cash flow: $160m vs 2025 cash dividends paid of $54.1m (c.3.0x cash cover).
Indicative cash cost of FY25 total DPS at current share count (c.1.92bn shares): ~$63m — comfortably covered by 2025 FCF.

Context from Results

Adjusted EBIT margin improved to 19.8%; adjusted EPS broadly in line with expectations.
Net debt (ex-lease): $815m; pro forma leverage 2.2x, expected to fall to <2.0x by end-2026.
Upgraded medium-term targets: operating margin 21–23% and cumulative FCF of ~$1bn over five years (post interest/tax/minorities/exceptionals, pre dividends/M&A).

Analyst’s View: Sustainability, Growth and Support

Sustainability: Dividend is well-covered on both earnings and cash metrics. Record FCF and cessation of UK pension deficit contributions strengthen ongoing cash coverage.
Growth trajectory: DPS up 5% in line with management’s “growing dividend” stance. With upgraded margin targets and adjacency/OrthoLite growth, low-to-mid single digit DPS growth appears achievable if cash conversion remains strong.
Support from financials/capital allocation: Strong cash generation, modest capex, and a clear leverage target (1–2x) underpin capacity to fund dividends alongside integration investments. Elevated interest costs and higher share count (equity raise) modestly temper per-share growth but do not threaten coverage.

Structural Changes and Policy Factors Relevant to Dividends

OrthoLite acquisition (EV $770m, completed Oct 2025) funded by $450m new loans and a $322m equity raise (c.320m new shares). Near-term: higher interest and larger share count increase the cash cost of dividends; Medium-term: expected synergies ($5m in 2026; $20m by 2028) and strong cash conversion support dividend capacity.
Exit of Americas Yarns (2025) improved Group margin by ~100bps and simplifies portfolio—positive for through-cycle cash generation.
Divisional restructure to two divisions (Apparel and Footwear) from H1 2026 should reduce complexity; neutral-to-positive for execution and margins over time.
UK pension buy-ins completed (2022/2024); deficit repair contributions ceased, freeing cash for dividends and growth.

Risks and Flags to Dividend Stability

Leverage/interest: Pro forma leverage at 2.2x and higher interest costs post-acquisition; a $300m bridge facility matures Oct 2026 (extendable 12 months) ? refinancing and rate risk to monitor.
Macro/end-market risk: Apparel/footwear demand uncertainty, tariff impacts, and supply chain risks (including the Middle East conflict) could pressure volumes.
FX/hyperinflation: USD reporting with broad EM exposure and Turkish hyperinflation add volatility to reported results.
Integration execution: Timely delivery of OrthoLite synergies and footprint optimisation is important for margin/FCF progression.
Legal: Ongoing US environmental matter (Lower Passaic River) remains provisioned and appears manageable, but is a background risk.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
01/05/2025	29/05/2025	Final	2.19¢	USX
16/10/2025	13/11/2025	Interim	1.00¢	USX

Total (Annual Dividends Per Share): 2.39p (Using exchange rate on 12/03/2026 $ = £0.74912)

Dividend Yield = Annual Dividends Per Share (2.39p) ÷ Share Price (87.9p) = 2.72%

Ex Dividend Date	Payment Date	Type	Amount	Currency
07/05/2026	28/05/2026	Final	2.28¢	USX
16/10/2025	13/11/2025	Interim	1.00¢	USX
01/05/2025	29/05/2025	Final	2.19¢	USX
17/10/2024	14/11/2024	Interim	0.93¢	USX
02/05/2024	30/05/2024	Final	1.99¢	USX
19/10/2023	15/11/2023	Interim	0.81¢	USX
27/04/2023	25/05/2023	Final	1.73¢	USX
20/10/2022	16/11/2022	Interim	0.70¢	USX
28/04/2022	25/05/2022	Final	1.50¢	USX
21/10/2021	16/11/2021	Interim	0.61¢	USX
29/04/2021	25/05/2021	Final	1.30¢	USX
30/04/2020	26/05/2020	Final	1.30¢	USX
24/10/2019	15/11/2019	Interim	0.55¢	USX
02/05/2019	28/05/2019	Final	1.16¢	USX
25/10/2018	16/11/2018	Interim	0.50¢	USX
03/05/2018	29/05/2018	Final	1.00¢	USX
26/10/2017	17/11/2017	Interim	0.44¢	USX
04/05/2017	30/05/2017	Final	0.84¢	USX

Year	Interim	Final	Currency	Total	Change
2024	0.930	1.990	USX	2.920	14.960
2023	0.810	1.730	USX	2.540	15.450
2022	0.700	1.500	USX	2.200	15.180
2021	0.610	1.300	USX	1.910	46.920
2020		1.300	USX	1.300	-23.970
2019	0.550	1.160	USX	1.710	14.000
2018	0.500	1.000	USX	1.500	17.180
2017	0.440	0.840	USX	1.280

Number of Shares:

Payment	Paid	Amount
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